Review of Low & Bonar arm after profits blow

Textile and performance materials firm Low & Bonar saw its shares tumble yesterday after it said its civil engineering business was not expected to make a profit this year amid tough market conditions.

The group, which has its roots in Dundee where it still has a yarns and fabrics facility, said although sales in the business unit were ahead on a constant currency basis, demand for higher value specification projects “remains subdued”. In a trading update yesterday the firm said management was now reviewing the civil engineering business and will make an “objective assessment as to its ability to reach and sustain the group’s financial targets”. The firm also said that raw material prices in the second half of the year have been affected by factors including the recent US hurricanes.

However, the board said it continues to expect the group to show good progress overall for the full year.